Parliament Question: Dependence on Chinese Lithium-ion Batteries

Executive Summary: The Ministry of Heavy Industries (MHI) addresses India's dependence on imported lithium-ion batteries, primarily from China and Southeast Asia, for its EV industry. The government is promoting domestic production through the Production Linked Incentive (PLI) scheme and the National Critical Mineral Mission (NCMM) to secure critical mineral supplies from diversified sources. The MHI is actively reviewing the progress of projects under the Advanced Chemistry Cell (ACC) battery program. Key Points / Main Content: Dependency on Imports: * India relies heavily on lithium-ion battery imports from China and other Asian countries. * This dependence exposes the EV industry to supply chain vulnerabilities and price fluctuations. Production Linked Incentive (PLI) Scheme: * Under the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, 40 GWh of ACC capacity has been awarded to four beneficiary firms. * Projects are currently under implementation; one firm has installed 1 GWh ACC capacity and is under pilot run. National Critical Mineral Mission (NCMM): * The Union Cabinet approved the NCMM, with a proposed expenditure of Rs. 16,300 crore and an expected investment of Rs. 18,000 crore by PSUs and other stakeholders. * NCMM aims to secure a long-term sustainable supply of critical minerals and strengthen India’s critical mineral value chains from exploration to end-of-life product recovery. * The mission spans seven years, from 2024-25 to 2030-31. International Collaboration for Mineral Sourcing: * The Ministry of Mines has bilateral agreements with countries including Australia, Argentina, Zambia, Peru, Zimbabwe, Mozambique, Malawi, and Cote d'Ivoire, and organizations like the IEA. * Khanij Bidesh India Limited (KABIL) was created to acquire overseas mineral assets, specifically targeting lithium and cobalt. * KABIL has an agreement with CAMYEN (Argentina) for lithium exploration and mining and has acquired 15,703 hectares for this purpose. * KABIL is exploring joint investments in Australian projects. * Ministry of Mines is engaging with multilateral platforms like Minerals Security Partnership (MSP) and Indo-Pacific Economic Framework (IPEF). Review of Advanced Chemistry Cell (ACC) Battery Program: * The MHI conducts monthly review workshops and quarterly field visits to assess project implementation progress. Impact Analysis: Ministry of Heavy Industries (MHI): * Impact: Responsible for administering the PLI scheme and overseeing the progress of ACC battery projects. Also tasked with monitoring and addressing the nation's reliance on imported batteries. * Action Required: Continue to monitor and support beneficiary firms under the PLI scheme, conduct regular reviews, and facilitate handholding to ensure projects meet targets. Beneficiary Firms (Under PLI Scheme): * Impact: Expected to establish domestic ACC battery manufacturing capacity. * Action Required: Implement projects as per the PLI scheme guidelines, achieve production targets, and participate in MHI's review workshops and site visits. Ministry of Mines: * Impact: Spearheading efforts to secure critical mineral supplies through international collaborations and the NCMM. * Action Required: Execute the NCMM, establish and maintain bilateral agreements, support KABIL in acquiring overseas assets, and engage in multilateral partnerships. Khanij Bidesh India Limited (KABIL): * Impact: Responsible for identifying and acquiring overseas mineral assets. * Action Required: Pursue exploration and development agreements, particularly for lithium and cobalt, and explore joint ventures in mineral-rich countries. EV Industry: * Impact: Will benefit from reduced reliance on imports, stabilized supply chains, and potentially lower battery costs. * Action Required: Monitor the progress of domestic battery production and adapt strategies based on the availability of locally manufactured batteries.

Key Entities Referenced